S&P Global reaffirms of Rwanda's B+ rating

S&P Global, a well-known rating agency, has recently reaffirmed Rwanda's credit rating at B+ with a stable economic outlook. This positive rating is a testament to the country's strong economic performance, government initiatives to boost domestic revenue, and prudent management of expenditures. The rating reflects Rwanda's overall economic and fiscal health, political stability, and development prospects. CNBC Africa recently interviewed Teddy Kaberuka, an Economic Analyst & Consultant at M4Progress Ltd, to delve deeper into the factors influencing Rwanda's creditworthiness and economic outlook. Kaberuka emphasized the importance of monitoring financial stability continuously to prevent any potential decline in the economy due to even minor mistakes. He highlighted the significance of stable fiscal and debt management, budgetary measures, debt management practices, and taxation frameworks in attracting foreign investment, determining external vulnerabilities, and fostering economic growth. Rwanda's fiscal policy has been instrumental in promoting economic growth, especially in key sectors such as services, construction, and agriculture, which have rebounded post-COVID-19. The country's robust fiscal policy has also facilitated investments in infrastructure, education, and technology, contributing to its favorable B+ rating. To ensure a balance between public investment and debt sustainability, Kaberuka underscored the importance of diversification of investments in transformative projects like energy production, infrastructure development, and tourism-related initiatives. He suggested that fiscal prudence, debt management, and public investment were crucial for Rwanda's economic stability and progress. While debt levels may seem high, Rwanda's ability to meet its debt obligations and mobilize funds for future investments has mitigated any potential risks associated with increasing debt levels. Kaberuka also mentioned the possibility of government-led privatization in the future to shift towards private-driven investments to further strengthen the country's economy. Addressing regional security threats, Kaberuka acknowledged Rwanda's vulnerability to external instabilities but noted that such challenges could impact the country's economic outlook and creditworthiness. Despite these concerns, Rwanda's proactive fiscal measures and strategic investments have positioned the country well to navigate potential risks and sustain its economic growth trajectory.